Cheshire drug company Alexion names new CEO to replace company founder

Alexion Pharmaceuticals Inc. in Cheshire has named a new chief executive, David L. Hallal, to replace current CEO and company founder Dr. Leonard Bell, effective April 1.

Bell will continue to serve as chairman of the board of directors, the company announced early Thursday. He has been CEO since the company began in 1992, as a way to commercialize Bell's research at Yale University.

Hallal, 48, who joined Alexion in 2006, was appointed COO in 2014.

The announcement came at the same time Alexion announced its 2014 financial results and fourth-quarter earnings.

The company develops biologic treatments for ultra-rare diseases. Its Soliris drug, which costs more than $400,000 a year for U.S. patients, is approved to treat two of these diseases.

Alexion sold $2.146 billion worth of Soliris in 2014, an increase of 38 percent from 2013. Its profits were $657 million, or $3.26 per share, compared to $253 million, or $1.27 per share in 2013.

Bell said in a release that Alexion is aiming for seven new indications or product approvals in the next three years. The most recent attempt to find another use for Soliris — for kidney transplant patients whose bodies are rejecting the organ, despite anti-rejection jobs — was not successful in its first clinical trial, but the company plans a clinical treatment trial this year.

In 2015, Alexion expects to start selling its second drug, Asfotase Alfa, in the United States and Germany in the first half of the year and in Japan before the end of the year.

Alexion's 2015 guidance is that Soliris sales should be between $2.55 billion and $2.6 billion. It did not give an earnings per share forecast by generally acceptable accounting principles, but said its margins are projected to be similar to 2014, but on 26 percent higher sales.

Bell said on a conference call Thursday morning that "our commercial and financial performance are at record levels," but that more significantly, he wanted investors to know that taxes in 2015 will be lower than forecasted a year ago, when the company announced it would do an Irish tax restructuring, though the company remains headquartered in Cheshire.

Last year, the company had projected global tax rates would be in the low double digits. It now says 2015's effective tax rate will be 7 percent to 9 percent. Part of that is because there were research and development tax credits the company was able to carry forward from past years, but also because the company has a better handle on where it's able to assign country-by-country profits. About two-thirds of the company's sales are outside the United States.

The Irish corporate tax rate is 12.5 percent; the U.S. corporate rate is 35 percent, though tax credits lower it substantially.

In questions by stock analysts Thursday, Eric Schmidt at Cowen and Co. asked whether 2015's revenue forecasts included estimates of how drug prices might fall in Europe, where national health care systems have pushed back against Soliris's high cost.

Chief Financial Officer Vikas Sinha said that the company has lowered the price for patients in Italy and Great Britain, and that "price erosion" is already in the forecast.

Alexion's cash and cash equivalents grew by $450 million to $1.9 billion.

When asked by a stock analyst what the company intends to do with such a large cash reserve, Sinha said the board has authorized using $500 million to repurchase the company's own stock. He said the company did $300 million in stock buybacks this past year, as well. He also said the company could buy other biopharmaceutical companies or license another company's drug candidate.

Incoming CEO David Hallal described the company's balance sheet as "aligned with our strong growth objectives."

Alexion plans to move from Cheshire to New Haven, and Connecticut has dedicated tens of millions in state subsidies through the First Five program as the company expands in the state.

The package includes a $6 million grant from the state, a subsidized $20 million loan that will be made into a gift if Alexion has 650 workers in Connecticut by 2017, and tax credits that could be worth as much as $25 million.